Household goods makers get emerging markets lift

By IBT Staff Reporter On 04/29/10 AT 11:32 AM

Developing markets were critical for consumer product makers last quarter, as strong sales growth in countries like China helped drive profits while markets such as the United States remain somewhat sluggish.

Anglo-Dutch Unilever Plc and U.S. manufacturers Procter & Gamble Co and Colgate-Palmolive Co all posted solid volume growth, albeit based on easy comparisons to a year earlier, when consumers held back on spending.

Unilever , which makes everything from Knorr soups to Dove soap, is seeing green sprouts of recovery, Chief Executive Paul Polman said. His company saw robust growth in emerging markets that offset stagnation in some developed regions.

P&G attributed much of its higher-than-expected profit to developing markets. It saw volume rise in all geographic regions, led by double-digit gains in emerging markets such as Brazil and Turkey.

P&G's volume increase was its strongest showing in more than four years.

The unit volume growth of 7 percent is fantastic, said Edward Jones analyst Jack Russo, who has a buy rating on P&G.

P&G's sales were a bit lighter than Wall Street anticipated, but Russo was pleased to see margin improvement even though the company used promotional prices to entice shoppers to try new products.

At Colgate, volume rose 6 percent. The company said its share of the global toothpaste market strengthened, led by share gains in Mexico, Brazil, China, India, Russia, Venezuela and Greece.

Colgate's sales rose 9.5 percent, but profit fell as it took a hefty charge to account for hyper-inflation in Venezuela.